2024 (8) TMI 1077 - AT - Income Tax

Ex-parte order without affording a proper opportunity of hearing which is against the Principles of Natural Justice and as such the order passed is arbitrary and unjustified - non-compliance on the part of the assessee but infact no email/notice or SMS was received by the assessee to check the Portal - HELD THAT - The matter now stands covered by the decision of Munjal BSU Centre of Innovation and Entrepreneurship Ludhiana through its authorized signatory Shri Bharat Goyal Vs Commissioner of Income Tax (E) Chandigarh 2024 (3) TMI 479 - PUNJAB HARYANA HIGH COURT held that the provisions of Section 282(1) of the Income Tax Act and Rule 127(1) of the Income Tax Rules 1962 envisage that it is essential that before any action is taken a communication of the notice must be in terms of these provisions; that these provisions do not make mention of communication to be deemed by placing the notice on the e-portal of the Department; that an pragmatic view has always to be adopted in these circumstances; that an individual or a company is not expected to keep the e-portal of the Department open all the times so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc.; and that the principles of natural justice are inherent in the Income Tax provisions and the same are required to be necessarily followed. The impugned order of the CIT(A) is therefore not sustainable in the eyes of law. Assessee is treated as allowed for statistical purposes.

Summary

Issues: Appeal against ex-parte order, delay in filing appeal, principles of natural justice, addition of cash deposits, condonation of delay

The judgment deals with the assessee's appeal against an ex-parte order for the assessment year 2011-12. The assessee contended that the order passed by the Commissioner of Income Tax (Appeals) was arbitrary and unjustified as it was ex-parte without proper opportunity of hearing, against the principles of natural justice. The appeal raised concerns about the dismissal of the appeal without discussing merits, alleged non-compliance, and upholding additions on cash deposits and interest credited in the bank account. Additionally, there was a delay of one day in filing the appeal before the Tribunal, for which the assessee sought condonation, citing reasons for the delay.

The Tribunal examined the reasons for the delay in filing the appeal and found that the assessee was prevented by sufficient cause from filing it on time. Consequently, the delay of one day was condoned. The assessee's counsel argued that the CIT(A) had summarily rejected the appeal without proper opportunity of hearing and without discussing merits, solely based on alleged non-compliance. The Tribunal noted that the decision was covered by a High Court ruling emphasizing the importance of communication in tax matters, stating that placing notices on the e-portal is not sufficient without explicit communication. The Tribunal set aside the CIT(A)'s order, directing a fresh decision with proper opportunity for the assessee and serving notice through physical and electronic modes.

In conclusion, the appeal was treated as allowed for statistical purposes, and the Tribunal emphasized the necessity of following principles of natural justice in tax proceedings. The judgment was pronounced on 13.08.2024.